Utility Week

12 | 26TH APRIL - 2ND MAY 2019 | UTILITY WEEK Policy & Regulation Analysis L ove it or hate it, retailers know the energy price cap is here to stay for now – and that's something that most of their customers appear to be pleased about. According to an exclusive survey carried out by Harris Interactive on behalf of Utility Week into consumer attitudes about energy pricing, the price cap and switching, and an overwhelming majority agreed or strongly agreed that a limit on typical standard vari- able tari• s (SVTs) should remain in place. The temporary price cap was brought into e• ect earlier this year in response to a public and political clamour about "rip-o• " energy bills. Its aim is to ensure customers pay a fairer price for their gas and electricity, and although it's not what many retailers want to hear, the public supports it. Before the cap – which is expected into last until 2020 – even made its entrance in the volatile energy marketplace on 1ˆ Janu- ary, set by Ofgem at £1,137 for dual fuel cus- tomers, it was cited as a key factor behind the sudden collapse of the proposed mega- merger between SSE's retail arm and Npower. And during its " rst six months in the spot- light, controversy has refused to go away. British Gas owner Centrica has applied for a judicial review into how the cap is calcu- lated; a clutch of small suppliers have gone to the wall; and the limit has already been raised in response to rising wholesale costs. It now stands at £1,254, for a typical cus- tomer depending on usage, a potential rise in bills of £117 a year for customers a• ected. The survey Yet despite its wider PR issues, our Harris Interactive survey found almost seven in ten people believed it had been necessary to introduce the energy price cap, with a simi- lar number stating that it should stay. At the same time, however, only one-third thought the price cap had actually lowered their energy bills. Two-thirds either disagreed or were ambivalent (see "Attitudes towards the price cap"), potentially reœ ecting some con- sumer confusion around the policy and a lack of knowledge about cheaper deals on the market. The snap poll, conducted between 28 and 29 March this year (a¢ er February's announcement that the price limit on energy bills had been revised upwards with e• ect from 1 April), aimed to: • fully understand the levels of awareness around the cap; • discover consumer attitudes toward the change; • gauge its e• ect and potential future impact on people switching suppliers. Awareness Asked if they were aware that an energy price cap was in place, a large majority (68 per cent) answered yes, compared with 22 per cent who said no. Awareness was signi" - cantly higher among men and the over-55s (see "Energy price cap awareness"). When invited to say in their own words what they thought the price cap meant for them, respondents understood it to be a maximum amount they would pay for their energy each month – something seen in a positive light by many. Comments included "a cap on the price customers can be charged for a product", and that "energy companies cannot charge extortionate rates to the customers" (see "Energy price cap understanding" info- graphic on p14). How popular is the price cap? It's one of the most divisive policies among suppliers but what do customers think of the energy price cap? Suzanne Heneghan reports on the fi ndings of an exclusive Utility Week survey continued overleaf WHAT CUSTOMERS THINK OF THE ENERGY PRICE CAP ➧ Among those switching to a small supplier, no single supplier stood out in terms of those switched to ➧ Among those switching to a medium supplier, respondents were more likely to have switched to Bulb Energy ➧ Amongst those switching to one of the big six suppli- ers, respondents were more likely to have switched to British Gas or EDF Energy

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